The decline in train usage has been pronounced in the first three months of 2018, with 9m fewer journeys from January through to March this year than in the same period in 2017. South Western Railway showed its lowest ever recorded figure for the period, a 7% fall from last year, partly ascribed to industrial action and the adverse weather in February, when the so-called beast from the east swept through Britain.

The numbers could spell more grim news for the struggling First Group, which admitted last month that it would lose £106m on its TransPennine Express franchise due to stagnating passenger numbers. It won the South Western franchise last year with a £2.6bn bid that ex-boss Tim O’Toole said was “disciplined”, with clauses that reduced its risk should the UK and regional economy hit the buffers after Brexit.

Last month First parted company with O’Toole, but said South Western remained profitable despite “challenges”. However, operators usually pledge higher payments to government in the later years of the franchise.

A spokesman for First said it had won the franchise with a focus on quality, with new trains and more capacity to come, and its bid had not been the highest in cash terms.

Concerns over franchising are high, with Virgin Trains East Coast due to cease operating on 23 June after its owners Stagecoach and Sir Richard Branson’s Virgin Group were unable to meet their promised £3.3bn payments with passenger numbers below forecasts.

The East Coast franchise will be taken back into public sector operation, and the latest figures will increase speculation that more franchises could fail. Questions have been raised by MPs over whether Abellio overbid for Greater Anglia, which suffered a further 2% decline in passengers last quarter, or Arriva for Northern, where customer numbers fell 9% in a strike-hit period.

An industry source said: “There were four or five franchise agreements which relied on massive growth rates … instead of which we are seeing them in decline. There is a structural problem here which could dwarf the timetabling issues, because it is more widespread.”

Labour said passengers were being priced off the railway. The sshadow transport secretary, Andy McDonald, said: “With fares rising three times faster than average wages since 2010 and severe disruption across the network, it’s no surprise that we’re seeing the biggest drop in passenger numbers in 25 years.

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“This not only worsens congestion and air pollution and contributes to climate change, it also threatens the sustainability of the railways [and] increases the likelihood of further bailouts, bankrolled by the taxpayer.”

The rail industry insisted that the drop was a blip. Paul Plummer, the chief executive of the Rail Delivery Group, which represents train operators and Network Rail, said: “There are over 1.7bn rail journeys made every year and despite some slowing down, this growth isn’t expected to hit the brakes in the long term.

“While technology may mean fewer people are travelling into work every day, anyone taking the train into our major cities will know that investment to run more trains is essential.”